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 |  | Hourly Rates: $100-$400 |  | Flat Fees: $400-$500 |  | Comprehensive Financial Review: $1,600-$4,000 |
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A financial planner helps clients create formal plans to manage their money over the long term to reach their goals (such as retirement or sending children to college), including the flexibility to handle financial emergencies. In a related service, a financial adviser (also called an investment adviser) will assess a client's current financial situation, compare it to the financial plan, and recommend appropriate next steps to follow the plan. Most financial planners are also financial advisors, but not all financial advisors are financial planners. The Security and Exchange Commission provides overviews of financial planners[1] and investment advisers[2] .
Typical costs: | - Certified financial planners generally charge in one of three ways: a fixed or hourly fee for a specific service (called fee-only); no fee but with a commission earned on the products bought; or a combination of a fee for the planning process and commissions on the products bought. The Financial Planning Association provides an overview of how planners charge for their services[3] , and Invest-FAQ.com describes the biases and potential conflicts[4] in each of the ways financial planners are compensated.
- Hourly rates can cost $100-$400, depending on location and the planner's qualifications, but average $175 an hour, according to Financial-Advisors.in. New Means Financial Planning, a fee-only service in New Hampshire, estimates that a financial consultation for clients in their 20s and early 30s can cost $540-$900, while a pre-retirement assessment could be $1,080-$1,800, and a comprehensive financial review might run $1,620-$3,960. Minerva Planning Group in Atlanta, Georgia, describes a sample retirement plan[5] that required seven hours of work at $190 an hour, for a total cost of $1,330. Flat fees (rather than hourly rates) are generally based on an average number of hours of work, and start around $400-$500 for basic financial plans and increase depending on the scope and complexity.
- Commissions range from 1 percent or less on money market accounts and treasury bills, up to 5.5 percent on mutual funds (which translates to $500-$2,375 on a $50,000 investment). Most financial planners will provide a half-hour or hour-long initial interview for free.
Related articles: Tax Returns, Stock Broker, Brakes, IRA
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What should be included: | - Financial planner services can range from a one-time analysis to ongoing oversight of any investments and other accounts. A financial planner may help with decisions like how large of a monthly mortgage payment a first-time homebuyer can handle without harming other financial areas, when to refinance a house, or deciding when and how to retire. The US Securities and Exchange Commission[6] provides a brief overview.
Shopping for a financial planner: | - Legally, anyone can call themselves a financial planner. However, several industry groups have credentialing programs; it's possible to search[7] the Financial Industry Regulatory Authority for an explanation of specific professional designations, such as Certified Financial Planner (CFP).
- Interview several planners to learn more about their skills, training, personality and services. If possible, meet face-to-face. Ask specific questions about their expertise, services included and what the plan will look like when the process is complete. The Financial Planning Association lists questions to ask[8] . The National Association of Personal Financial Advisors, whose members are all fee-only planners, provides tips and tools[9] for choosing a financial planner. And MSN.com lists 8 Things a Financial Planner Won't Tell You[10] .
- Search for local financial planners with the Certified Financial Planner Board of Standards[11] , Financial Planning Association[12] or the National Association of Personal Financial Advisors[13] .
- The financial planner selected will provide a written agreement clearly outlining all the services that will be provided. Keep this document on file for future reference.
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What People Are Paying - Recent Comments |
| Posted by: Prasad in Kansas City, MO. | Posted: October 3rd, 2014 09:10AM |
| Commission or Fee Only: Fee Only | Type of Service: Financial Planning |
Ran 5 different scenarios to cover our current assets and liabilities across three countries |
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External Resources: | - www.sec.gov/answers/finplan.htm
- www.sec.gov/investor/pubs/invadvisers.htm
- www.fpanet.org/FindaPlanner/HowPlannersCharge/
- invest-faq.com/articles/fplan-compensation.html
- www.minervaplanninggroup.com/sample-financial-plans/
- www.sec.gov/answers/finplan.htm
- apps.finra.org/DataDirectory/1/prodesignations.aspx
- www.fpanet.org/FindaPlanner/ChoosingaPlanner/QuestionstoAsk/
- www.napfa.org/tips_tools/index.asp
- money.msn.com/retirement/
- www.cfp.net/utility/find-a-cfp-professional
- www.fpanet.org/PlannerSearch/PlannerSearch.aspx
- findanadvisor.napfa.org/Home.aspx
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